Graft crackdown set to continue and intensify(2)

Spotlight on SOEs

At the end of the Chinese New Year holiday, the anti-corruption watchdog launched a round of inspections of State-owned enterprises. So far, CCDI inspection teams have visited 26 large SOEs, including State Grid Corp, China Shipbuilding Industry Corp, China Huaneng Group and China National Petroleum Corp.

A senior CCDI official, who declined to be identified, said, "We will accept complaints about misconduct involving SOE's directors in their working and personal capacities via phone calls, e-mail and personal meetings."

At a meeting in January, the commission decided to redouble its inspections of SOEs, especially of directors in key positions.

Hao Mingjin, vice-minister of supervision at the CCDI, said: "The operations of some SOEs are closely related to national economic security. Corruption can result in huge losses and seriously compromise economic security. Some SOE directors have colluded with foreign forces to trade national assets in return for huge sums of money. We will resolutely fight abuses such as these."

In recent years, SOEs have been at the center of a number of cases of graft, mainly related to management issues, personal arrangements or audits that resulted in huge losses and posed potential threats to the country's economic security.

Dong Dasheng, a CPPCC member and former national deputy auditor-in-chief, said the overseas assets of SOEs under the direct supervision of the central government are valued at about 4 trillion yuan ($637 billion), but despite the huge amounts involved a formal audit has never been undertaken.

Moreover, some SOEs' directors are alleged to have bought and sold positions, embezzled public funds, or abused their power by arranging for their spouses and children to live overseas and run businesses, according to the CCDI.

Some officials bent the rules when awarding contracts, while others appointed family members to posts for which they were unqualified, or formed intra-party factions, according to the commission.

Since the Party Congress in 2012, CCDI teams have probed 14 major SOEs - in all, 118 central SOEs have been investigated - and more than 70 executives have been dismissed.

"It's essential that the overseas assets of central SOE's are audited to ensure that they are transparent, well-managed and not vulnerable to corrupt elements," said Dong, who added that a regular auditing mechanism for SOEs is urgently needed.

According to Xiong, from the North University of China, most of the SOE directors being investigated controlled valuable national resources, including petroleum, gas, coal and electricity. "To curb rampant corruption in SOEs, we need to break the monopolies and allow the market to determine the allocation of resources," he said.

Gao Bo, deputy secretary of the China Anti-Corruption Research Center of the Chinese Academy of Social Sciences, said: "SOE directors should be made more aware of their responsibilities so they will raise standards and encourage clean governance. We also need to establish a permanent supervision mechanism to oversee the use of power and to punish corrupt officials."

President Xi told the January meeting of the CCDI that the complexity and intractability of corruption means China still faces tough challenges, and warned that the battle is far from over. Anti-corruption mechanisms have been put in place but they aren't perfect, so corruption still exists and temptations remain, he said.

According to Zhao Hongzhu, deputy head of the CCDI, some officials still abuse their power and accept huge bribes because they can quickly line their pockets with millions, or even hundreds of millions, of yuan.

Others use their powers to establish close political or economic interests with other officials and company directors. Many secretly form factions, he said. The central leadership is fully aware that, historically, corruption was at the heart of several dynastic collapses and the failures of established political parties.

The CCDI said it would attach great importance to investigating officials who continue to act corruptly or display low moral standards even in the face of the anti-graft campaign.

Other targets will include officials involved with political and economic cliques, and those with poor public reputations. The probity of officials likely to win promotion to key positions will also be investigated to ensure smooth progress.

"Efforts to rectify the four undesirable work styles - formalism, bureaucratism, hedonism and extravagance - should continue," President Xi said. "Our determination to use strong medicine to cure illness will not falter, and our strength to rid our bones of poison will not diminish," he added.